The Sensex opened nearly 33 points higher at 78,239, while the Nifty 50 slipped about 30 points to start the session at 24,232. This comes a day after the benchmark indices rebounded sharply following a steep selloff, as crude oil prices dropped below $90 after surging past the $110 per barrel mark earlier.
Tech Mahindra, IndiGo, Tata Steel, Asian Paints and Reliance Industries were among the top gainers on the Sensex, while Kotak Mahindra Bank, ICICI Bank, Bharti Airtel, Bajaj Finance and Mahindra & Mahindra (M&M) led the losses.
Heavyweight shares of Reliance Industries (RIL) gained after US President Donald Trump said the Mukesh Ambani-led company would partner in developing the first new oil refinery in the United States in 50 years.
Most sectoral indices on the NSE were trading with marginal gains and losses. Nifty Metal and Nifty Pharma rose nearly 1% each, while Nifty Auto, Nifty FMCG and Nifty Private Bank traded in the red.
Iran-Israel war rages on
Despite earlier expectations of a quick resolution to the war in the Middle East, geopolitical tensions continue to rattle the oil-rich region. The US and Israel launched what some described as the war’s heaviest strikes on Iran, even after US President Donald Trump said on Monday that the conflict could be “over soon.”
Iran’s government warned that its state security forces were ready with “fingers on the trigger” to confront any revival of anti-government protests. The country targeted several areas in Israel, Lebanon and the Gulf early on Wednesday as the war stretched into its 12th day.This has raised expectations of a prolonged closure of the Strait of Hormuz despite earlier assurances from Trump. Iran’s Islamic Revolutionary Guard Corps has threatened to block oil shipments from the Gulf unless US and Israeli attacks stop.
Crude impact
Crude oil prices edged higher on Wednesday. Brent crude rose 46 cents to $88.26 per barrel at 9 am IST, while WTI crude gained 56 cents to $84.01 per barrel.
Oil prices had surged earlier this week, crossing the $100 per barrel mark for the first time since the Russia-Ukraine war began in 2022. Prices later plunged sharply, falling below $90 in the previous session. Although crude remains below that level, it has edged up slightly today.
Notably, the International Energy Agency (IEA) has proposed the largest release of oil reserves in its history to ease the global oil crisis and stabilise crude prices, the Wall Street Journal reported citing people familiar with the matter.
Rupee declines
The Indian rupee opened 0.14% lower at Rs 91.9350 against the US dollar, compared with the previous close of Rs 91.8050. Despite the decline, the currency remains below the crucial 92 mark. Earlier on Monday, the rupee had fallen 53 paise to settle at an all-time low of 92.35 against the US dollar.
“With crude cooling and the dollar slightly weaker, sentiment for the rupee has improved. The expected trading range remains between 91.25 and 92.60, with crude price movements and the dollar index continuing to guide the currency’s near-term trend,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities.
Global markets
Global markets were mostly trading in the green. Japan’s Nikkei 225 gained around 3%, while South Korea’s Kospi rose nearly 3.6% as of 9:11 am IST. Hong Kong’s Hang Seng and China’s Shanghai Composite were trading marginally higher.
European markets ended the previous session on a strong note, with the UK’s FTSE rising 1.6%, France’s CAC gaining 1.8% and Germany’s DAX climbing 2.3%.
FII selling continues
Foreign investors remained net sellers on Tuesday as well, net selling Indian equities worth Rs 4,672.64 crore yesterday. While this doesn’t reflect their trading behaviour today, persistent selling by foreign investors dampens investor sentiment.
According to market data, FPIs net sold Indian equities worth more than Rs 21,800 crore in the first week of March.
There are some important market trends that investors should analyse and try to understand now, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. “One, the FII vs DII game is back to the last one-year pattern of sustained selling by FIIs being more than matched by sustained buying by DIIs. Given the continuing indifference of FIIs towards India and the sustaining inflows into Indian equity mutual funds, this game is likely to continue in the near-term. Two, despite the weakness in the market some segments like pharmaceuticals and domestic consumption themes like telecom, automobiles and defence are exhibiting resilience,” he added.
“Sustained FII selling has made large banking stocks, which constitute the largest segment of FII’s AUM, attractive. These stocks have the potential to reward investors who can buy and hold them for at least two years. Here patience is the key. The decline in Brent crude to below $88 will improve the risk-on sentiment in the market,” he further said.